Lagarde: The risk of the French government's downfall is worrying

European Central Bank President Christine Lagarde expressed concern over the risk of a possible collapse of the French government. She warned that political unrest in any eurozone country would put pressure on the market.

French Prime Minister Jean-Pierre Bellou suddenly announced a vote of confidence in the government last week, and most opposition parties have indicated that they will vote against it. The government is very likely to step down as a result. Lagarde told French Classical Radio on Monday (September 1st) : "The risk of any government in the eurozone collapsing is worrying."

She stated: "The development of the political situation and the emergence of political risks have a significant impact on the assessment of national risks in the economy and financial markets. Therefore, we are concerned about the political situation in France."

Beru has been the prime minister for only nine months and is now facing the most crucial test of his political career. The government's austerity budget for the fiscal year 2026 was widely rejected by the opposition and public opinion. Last week, Beru asked the National Assembly to hold a vote of confidence in the government on September 8.

Radio France Internationale reported that Bellou hopes to first get the parliamentarians to reach a consensus on the severity of the country's financial situation and give the government trust. If the government can survive the confidence vote, further discussions will be held on the specific measures in the draft budget in the second stage.

However, the opposition camp has made a clear statement. From the far-right party National Union to the far-left party "Unyielding France", as well as the environmental protection Party and the French Communist Party, almost all opposition parties have threatened to cast a vote against in the confidence vote.

Since taking office in December last year, the Belu government has not received a majority of support in the parliament.

AFP pointed out in an earlier report that unless there is a major reversal of the situation, these united opposition forces mean that France will be effectively in a state of "anarchy" within two weeks. This will be another turmoil following the political unrest in France triggered by Macron's dissolution of the National Assembly in June last year, and it may also affect the financial market.